Bellway's shares gain as Canaccord reiterates 'buy' rating

Bellway’s shares gained on Tuesday as Canaccord Genuity reiterated its ‘buy’ rating and 3,390p target price after the housebuilder’s first half profits beat expectations.

In the six months to the end of January, pre-tax profit rose 42.6% to £226.6m, beating Canaccord’s forecast of £216m.

Revenue rose 30.5% to £1.08bn as the number of homes sold was increased 11.6% to 4,188 compared with 3,754 the year before, while the average selling price increased 17.3% to £257,280.

Earnings per share came in at 148.7p from 103.5p in the same period a year ago and the company lifted its interim dividend 36% to 34p per share.

The interim dividend was raised 36% to 34.0p.

Bellway said the outlook was positive and housing completions for the full year are expected to increase by at least 10%, as is the average selling price. The operating margin, meanwhile, should approach 22% for the full year.

“We would expect consensus PBT to move up by around +5% on the back of these results. Reassuring set of results and outlook comments overall,” said Canaccord analysts Aynsley Lanmin and Matthew Walker.